Car Insurance Sucks!!!!

[Nerull]

Originally posted by Illumina Drathiran'ar: When discussing car insurance and extortion, I simply have two words. New Jersey. Those of you who drive and live in New Jersey, you know what I'm talking about.

I used to live in New Jersey; in fact, started driving there. You should have heard my mother when she had to add me to her insurance policy...

Insurance is definitely one of the most profitable legal rackets you can be in.

[pritchke]

What I find funny is everytime the government decides to bring the hammer down on insurance companies they cry "foul" and "we will end up declaring bankruptcy". Do a little research and you find that almost all the insurance companies are doing well with billions in profits for the industry and it would take a disaster of galactic proportions to send them under.

[ 03-29-2004, 10:56 AM: Message edited by: pritchke ]

[Azred]

Originally posted by Nerull: Insurance companies are now essentially the 800 gorilla politically in the United States. It's my job to try to collect payments from insurance companies at my hospital. Let me tell you, you pay more and more now and get less and less benefit. I can't tell you how many times I've had to bill a patient for $10,000 U.S. or more for medical bills because they have some plan that only pays a fixed amount per day in the hospital; they are probably paying more in premiums for the policy than they get in benefits. Sucks, but that's the way the insurance game is anymore.

Having been an actuarial analyst for BCBSTX, I know exactly what you mean. In the first 6 months of my tenure with BC, I helped do the research that led directly to many of the individual and small group health plans "enjoy" a drastic rate hike. Definitely a job that leaves a bad taste in your mouth, if you aren't careful (not to say that I wouldn't jump back into the field if a position becomes available).

Originally posted by Nerull: Car insurance is no different. I had mine jump from $89.00 a month (after years of driving under the same policy with no accidents or tickets) to $128.00 a month with no explanation whatsoever.

What many people don't realize is that when you obtain car insurance you are placed in a general group based on age, gender, occupation, city of residence, etc. which might contain 1,000,000 other drivers. If the experience--the history of claims being paid out--of that group goes up, then the premiums will also rise because of this. To make a long story short, your personal driving record really doesn't have a whole lot to do with your insurance rates...unless you get a speeding ticket or other moving violation, in which case you will be placed in a group suffering much higher premiums. Heaven forbid you are in an accident--some companies (like State Farm) will drop you, even if the accident is not your fault. [img]graemlins/saywhat.gif[/img]

Originally posted by Nerull: Then I did some research, and what I essentially found is that many of the car insurance companies are simply subsidiaries of larger companies that have more than just car insurance (home, auto, etc.). There was heavy flooding from storms on 2 of the past 5 years in Texas, so they took two steps: first, they raised rates on home policies while greatly reducing coverage and/or refusing to renew policies in "high risk areas"; and second, they passed the costs from paying for the flooding to their other divisions (i.e. raised the rates on auto, etc.).

Fun, isnt' it? [img]tongue.gif[/img]

Originally posted by Nerull: Needless to say I was pissed about that, but after years of working with insurance companies, I've realized that they hold most of the cards politically, and pretty much do whatever they want. And it always ends up being the little guy trying to protect his or her investment that ends up suffering. So don't feel too bad, pritchke; you are in good company with a large portion of this continent. It just sucks that it is that way, and I do feel your pain.

It is really bad here in Texas, especially since the Legislature decreed that every driver must carry at least liability insurance. This simple plan gives absolute governmental support to the auto insurance industry; that is to say, the insurance industry thrives in Texas because of mandated governmental subsidies. Great for companies like GAINSCO (they're in Fort Worth; I also worked for them as an analyst) but not so great for consumers.
However, to be fair to the insurance companies one must not discount other factors that contribute to rising premiums such as frivolous lawsuits, excessive awards from those lawsuits, and scams like the guys in cars who try to get into relatively minor accidents so they can collect insurance payouts.
Eventually competition and consumer frustration will drive the premium levels back down, but that day is probably 10 years away. *sigh*

[Nerull]

Yes, I live in Texas, too, and I can tell you that auto insurance these days is the biggest racket. Try driving in San Antonio, where most of the town is poor. Many of the drivers don't have insurance, and you can go to most mechanics that do inspections (the little guys, not the official sites or big companies) and get the sticker with little or no inspection and no check of insurance (which is mandated by law). So what do the insurance companies do? Raise the rates on the people who do pay to make up the difference in profits. Add in all the uninsured motorist accidents that they make up by raising my rates and you can pretty much forget it. I have been tempted many times to go without insurance, but knowing my luck I would hit a cop or something like that...

Health insurance is a similar joke. It is off topic, so I won't bother to elaborate too much on it. Texas is one of several states that has stricter rules as far as payment deadlines, etc. They left some exceptions designed to help the "little guy" out (self-funded plans, etc.), and of course federal "ERISA" plans can ignore state laws. So what happened after passing the stricter regulations? Within 6 months, pretty much every single insurance company either picked up federal plans to fall under ERISA (the bigger companies) or reorganized to have self-funded or other "excepted" plans. The result? We're still having to chase these people for 3-6 months on claims they are supposed to have paid in 45 days. Who pays for it? The patient, since all of the costs of having to chase the insurance company gets passed down as higher charges (which causes the insurance companies to clamp down tighter, causing a vicious circle in which for the most part only the person holding the policy loses).

I always tell new employees one thing during orientation to help them put it in perspective. Insurance companies are investment firms; they take the premiums and invest them to make their profits. And the best investments for insurances are long-term investments. So, if they have to pay out on claims, they have to liquidate these long-term investments, causing them to lose money in more than one way. Thus, you can pretty much expect them to do anything in their power to get away with not paying the claim.

[Illumina Drathiran'ar]

Used to live in NJ, now in Texas, driving all the way... Someone's a glutton for punishment, hm?

[Nerull]

Originally posted by Illumina Drathiran'ar: Used to live in NJ, now in Texas, driving all the way... Someone's a glutton for punishment, hm?

[img]graemlins/offtopic.gif[/img]

[img]graemlins/laugh2.gif[/img] Yep...it's a big change. It took me years to get accustomed to the changes in cultures, attitudes, etc. And the drive is not fun, either. Make sure you do your best to get a good night's sleep when you do have to stop, as the landscape gets really repetitive after a while.

What part of Texas are you moving to?

[Illumina Drathiran'ar]

No no no, I was talking about you. "Driving all the way" implied that you were driving in both states.
I should have been clearer.

[pritchke]

Just an update on this. I have gone over too the insurance company that I have home Insurance with. Only $150/month which is almost 5 times as cheep. I am now a happy camper.

[Mouse]

£210 per year, fully comprehensive with protected no claims bonus

Sometimes being old and slow(ish) has it's advantages......

[Tobbin]

It's not all that great here in FL either. We have accidents EVERYDAY over here and in/out of Tampa. Needless to say, insurance is a lot higher. I used to pay about $150 every 6 months (basic insurance, not full) when I was living in NC. When I moved to FL, it jumped up to almost $300. It's almost $400 every 6 months now. BTW, it got so bad here (insurance prices) that a local TV news reporter did a story on it. They brought up some interesting facts. Yes, it does have to do with location. It also has to do with credit worthiness too. Did you know that a lot of insurance companies are now running credit reports on people, claiming that if you are loose with your money, that you must be a bad driver? It also had to do with other claims like was mentioned too (natural disasters and/or whatever might make their coffers smaller.) It is definitely a racket. If you don't have insurance here, you automatically give up your license if pulled over (unless the cop is feeling really sorry for you or something.) So, what happens if you can't make a payment (insurance, not a loan)? You are caught in a Catch-22. You can't drive without your insurance, but you can't pay for your insurance until you build up money. How do you build up money. Driving to work!!!!!!!!!!!